Standing Committee E

[Mr. Peter Atkinson in the Chair]

Communications Bill

Clause 193 - Functions of OFCOM in relation to the BBC

Andrew Lansley: I beg to move amendment No.22, in
clause 193, page 171, line 12, at end insert— 
 '( ) the BBC Charter;'.

Peter Atkinson: With this it will be convenient to discuss the following:
 Amendment No.43, in 
clause 193, page 171, line 17, at end insert 
 'and to enforce the terms of the BBC Fair Trading Commitment as currently drafted'. 
Amendment No.149, in 
clause 193, page 171, line 23, at end insert— 
 '(2A) In exercising their functions under this section OFCOM shall consult with and have regard to the views of persons providing services and facilities other than the BBC who, in their opinion, are likely to be affected by the BBC's services.'.
 New clause 18—BBC statements of programme policy— 
'(1) Any agreement made (whether before or after the coming into force of this section) between the BBC and the Secretary of State to regulate the provision of the BBC's services shall include (and in the event the agreement does not so include shall be deemed to include) an obligation on the BBC— 
 (a) as soon as practicable after the coming into force of this section and subsequently at annual intervals to prepare and publish a statement of programme policy for each of the BBC's services; and 
 (b) for the BBC to monitor its own performance in the carrying out of the proposals contained in the statements. 
 (2) Every statement of programme policy must include— 
 (a) proposals for securing that during the following year— 
 (i) the public service role of the BBC and the BBC's services will be fulfilled; 
 (ii) the functions, duties and obligations of the BBC and the BBC services as set out in the Charter and Agreement will be fulfilled; 
 (iii) such other matters as OFCOM may determine from time to time; 
 (b) a report on the performance of the BBC in the carrying out, during the period since the previous statement, of the proposals contained in that statement. 
 (3) The BBC shall comply with subsection (4) in the case of a statement of programme policy containing proposals for a significant change. 
 (4) This subsection requires the BBC— 
 (a) to consult OFCOM before preparing the statement; and 
 (b) to take account, in the preparation of the statement, of any opinions expressed by OFCOM. 
 (5) If it appears to OFCOM that a statement of programme policy has been prepared by the BBC in contravention of a condition imposed under subsection (4), the BBC must— 
 (a) revise that statement in accordance with any directions given to it by OFCOM; and 
 (b) publish a revision of the statement in accordance with any such directions only after the revision has been approved by OFCOM. 
 (6) A change is a significant change for the purposes of this section if it is a change as a result of which the service would in any year be materially different in character from in previous years. 
 (7) In determining under this section whether a change is a significant change— 
 (a) regard must be had to any guidance issued by OFCOM; 
 (b) the changes to be considered include any changes that, together with any proposed change for a particular year, would constitute a change occurring gradually over a period of not more than three years; and 
 (c) the previous years with which a comparison is to be made must be those immediately preceding the year in which the change is made, or in which the changes comprised in it began to occur. 
 (8) It shall be the duty of OFCOM— 
 (a) from time to time to review the guidance for the time being in force for the purposes of this section; and 
 (b) to make such revisions of that guidance as they think fit.'.
 New clause 19—Duty of OFCOM in relation to the BBC's new services— 
'(1) Prior to the Secretary of State approving under the Charter or the Agreement the provision by the BBC of any new service or changes to an existing service whether or not a broadcasting or programme supply service it shall be the duty of OFCOM to prepare and publish a report commenting on whether the proposed new service or changes to the existing service will satisfy the objectives set out in subsection (2). 
 (2) The objectives referred to in subsection (1) are— 
 (a) the new service or the changes to the existing service are compatible with the BBC's primary public service role as set out in the Charter and Agreement and that it shall further any or all of the public purposes of the BBC or any of the services it provides as set out in those documents; 
 (b) that the value to the public of the new service or changes to an existing service will be proportionate to the likely impact on the market; 
 (c) that the new service will be universally accessible within a reasonable period of time free at the point of use; 
 (d) that the new service or the changes to the existing service will represent value for money for licence fee payers. 
 (3) It shall be the duty of OFCOM— 
 (a) as soon as practicable after the end of the period of twelve months beginning with the commencement of this section; and 
 (b) as soon as practicable after the end of each subsequent period as may be selected by OFCOM for the purposes of this section 
 to satisfy, for that period, the review and reporting obligations of subsection (4). 
 (4) The review and reporting obligations are— 
 (a) an obligation to carry out a review of the extent to which new services provided by the BBC and changes to existing services— 
 (i) comply with the terms of the approval granted by the Secretary of State for such new services or changes to existing services; and 
 (ii) satisfy the objectives set out in subsection (2); 
 (b) an obligation to prepare a report on the matters found on the review. 
 (5) In this section 
 ''Charter'' means the Royal Charter for the Continuance of the British Broadcasting Corporation—May 1996 and any renewal or replacement thereof; 
 ''Agreement'' means any agreement made (whether before or after the coming into force of this section) between the BBC and the 
Secretary of State to regulate the provision of the BBC's services and the carrying on by the BBC of other activities for purposes connected with the provision of those services. 
 (6) In this section for the purposes of the review and reporting obligations of OFCOM ''new services'' shall mean all new services approved (whether before or after the coming into force of this section) by the Secretary of State under the Charter or the Agreement.'.
 New clause 20—OFCOM review duties in relation to BBC's services— 
'(1) Prior to the Secretary of State approving under the Charter or the Agreement the provision by the BBC of any new service or changes to an existing service whether or not a broadcasting or programme supply service it shall be the duty of OFCOM to prepare and publish a report commenting on whether the proposed new service or changes to the existing service will satisfy the objectives set out in subsection (2). 
 (2) The objectives referred to in subsection (1) are— 
 (a) the new service or the changes to the existing service are compatible with the BBC's primary public service role as set out in the Charter and Agreement and that it shall further any or all of the public purposes of the BBC or any of the services it provides as set out in those documents; 
 (b) that the value to the public of the new service or changes to an existing service will be proportionate to the likely impact on the market; 
 (c) that the new service will be universally accessible within a reasonable period of time free at the point of use; 
 (d) that the new service or the changes to the existing service will represent value for money for licence fee payers. 
 (3) The BBC shall— 
 (a) as soon as practicable after the coming into force of this section and subsequently at annual intervals prepare and publish a statement of programme policy for each of the BBC's services; and 
 (b) monitor its own performance in the carrying out of the proposals contained in the statements. 
 (4) Every statement of programme policy must include— 
 (a) proposals for securing that during the following year— 
 (i) the public service role of the BBC and the BBC's services will be fulfilled; 
 (ii) the functions, duties and obligations of the BBC and the BBC's services as set out in the Charter and Agreement will be fulfilled; 
 (iii) such other matters as OFCOM may determine from time to time; 
 (b) a report on the performance of the BBC in the carrying out, during the period since the previous statement, of the proposals contained in that statement. 
 (5) It shall be the duty of OFCOM as soon as practicable after the end of the period of twelve months beginning with the commencement of this section and thereafter at such periods as OFCOM may determine to prepare and publish a report which must— 
 (a) comment on the extent to which new services provided by the BBC and changes to existing services— 
 (i) comply with the terms of the approval granted by the Secretary of State for such new services or changes to existing services; and 
 (ii) satisfy the objectives set out in subsection (2); 
 (b) comment on the extent to which the BBC has— 
 (i) fulfilled any statement of programme policy made by it; 
 (ii) made an adequate contribution towards the satisfaction of the general purposes of public service television broadcasting in the United Kingdom set out in section 256(4); 
 (c) specify the changes which in the opinion of OFCOM are required to the agreement between the BBC and the Secretary of State to ensure that the BBC fulfils the statements of programme policy referred to in subsection (3) and that the BBC makes an adequate contribution to public service television broadcasting in the United Kingdom. 
 (6) In this section— 
 ''Charter'' means the Royal Charter for the Continuance of the British Broadcasting Corporation—May 1996 and any renewal or replacement thereof; 
 ''Agreement'' means any agreement made (whether before or after the coming into force of this section) between the BBC and the Secretary of State to regulate the provision of the BBC's services and to carrying on by the BBC of other activities for purposes connected with the provision of those services. 
 (7) In this section ''new services'' shall mean all new services approved (whether before or after the coming into force of this section) by the Secretary of State under the Charter or the Agreement.'.
 New clause 29—Power to confer further functions on OFCOM relating to the BBC— 
'(1) The Secretary of State may by order amend this Act to such extent as he considers appropriate to give effect to the provisions of— 
 (a) any Royal Charter granted to the BBC after the commencement date; 
 (b) any licence granted by the Secretary of State to the BBC after that date; 
 (c) any agreement made by the Secretary of State and the BBC after that date. 
 (2) In subsection (1) ''the commencement date'' means the date of commencement of section 193. 
 (3) An order under this section shall not be made unless a draft of the order has been laid before Parliament and approved by a resolution of each House.'.

Andrew Lansley: Good morning, Mr. Atkinson. This is the first occasion in the new year that we have had a chance to welcome you. We have been busy since you have been away from us, and we have reached clause 193. As members of the Committee will be aware, the clause's purpose is to bring the BBC into Ofcom's remit under the BBC Ofcom agreement that is to be made, and amended, between the Secretary of State and the BBC.
 Amendment No. 22 would insert a reference to the BBC charter in clause 193(1). That would imply that if Ofcom's functions in relation to the BBC were set out in the BBC charter, rather than elsewhere in the Bill or under the agreement, they would be functions of Ofcom in relation to the BBC. 
 Several other amendments and new clauses are grouped with the amendment, and if I may, I shall take the liberty of making several general points about the BBC now rather than trying to intervene as we go along. It might be helpful if I thank the Minister for a copy of the proposed amendments to the agreement. I now understand why it is intended that we should finish voting at 7 pm or 7.30 pm: so that we can spend the evening looking at the papers for the following day's Committee—that was my experience last night. I shall try to cover several points relating to the amended agreement as we go along. 
 I did not table the amendment to diminish the BBC's activities—on the contrary. Many members of the Committee might share my view that the BBC has successfully used the licence fee to stimulate creativity 
 and to sustain the quality of broadcasting during recent years. That is not distinct from other broadcasters, but in addition to other broadcasters. I do not want the BBC to be a broadcaster of last resort. If the BBC's purpose is to spend the licence fee, which is a large amount of money, I would want the licence fee to be used not as a substitute for the activities of others, but to provide broadcasting quality, innovation and creativity rather than broadcasting that follows others and fills gaps that might emerge. If we are applauding the BBC's activities, as things stand, and if the BBC's role is defined, in part, as meeting broadcasting needs that are not met successfully by others. BBC Freeview is a good example of that role and of how the broadcasting environment can be improved by the BBC's use of licence fees. 
 The BBC should deliver quality, creative and innovative broadcasting that is intended to satisfy a wide range of viewers, notwithstanding the fact that viewers often receive broadcasting from other sources. That extends not simply to the production of programming material but specifically to the controlling of networks. There is a danger that we see the BBC as a programme producer but not necessarily as a channel provider, which it must be. In a multichannel world, it will become increasingly difficult for viewers and listeners to have access to pre-prepared networked channels that offer a range of broadcasting as distinct from the niches, each of which may have specific commercial justification. 
 If we have free-to-air broadcasting, there is everything to be said for it being apart by way of delivering networks. That would demonstrate innovation and creativity not only in the content of programmes but in the way in which they are interleaved into a network, and viewers and listeners would be given the opportunity to mix tastes in ways that stimulate a wider interest in broadcast material.

Michael Fabricant: My hon. Friend is making an interesting and powerful point as eloquently as ever. Does he agree that one problem with the BBC operating in its own environment outside the control of either the Independent Television Commission or Ofcom, at least under this particular pillar, is that rumours begin which, whether or not they are true, cause unhappiness among viewers? For example, it was rumoured that political and religious programmes would be sidelined onto digital channels. Both those things were feared but were untrue. If there were a clear understanding that an outside agency such as Ofcom would control that issue, such rumours would not arise.

Andrew Lansley: I understand my hon. Friend's point. I share his view that, not only were those rumours untrue, they were never likely to be true. Therefore, we should be careful not to structure legislation or organisation around rumours. He makes a fair point about the extent to which the public, as providers of the licence fee, can be assured about the independent regulatory structure under which the licence fee is spent and such services are provided.
 Having expressed my appreciation of the BBC's role, we should all be aware of the risks associated with its position in broadcasting. Later in the Bill, we will discuss the wider structure of broadcasting, of which the BBC occupies a substantial share. With due regard to my hon. Friend's recent remarks, we must be careful to be accurate, but because of that share it is possible rather than proven to claim that the BBC is capable of cross-promotion to an extent that gives it anti-competitive benefits in the broadcasting marketplace. 
 It is possible that the extent of the BBC's commercial exploitation could be a distortion of competition in the marketplace—I especially recall the issues put to me in relation to schools programming and the supply of educational material by the BBC. The BBC clearly occupies a dominant position in the marketplace, but as we have seen elsewhere in the Bill and will later discuss, dominance per se is not an offence. However, the constraints and regulatory oversight required in relation to such a position ought to give us pause for thought. 
 Amendment No. 43 relates to incorporating the enforcement of the BBC fair trading commitment into the functions of Ofcom. I have every sympathy—as, I suspect, do the Government—with what that amendment is trying to achieve, but I am not convinced that the amendment is the way to achieve it. There is a risk that we might elevate the BBC fair trading commitment to the point where it is regarded as the ultimate expression of the BBC's obligations in relation to the avoidance of distortions or anti-competitive effects. It is not that; it is merely the BBC's full and comprehensive expression of how it intends to meet its competition obligations and of other measures that it seeks to impose internally to meet another range of impartiality and related objectives.

Michael Fabricant: Does my hon. Friend agree that, when public money is involved, there is a locus for Government legislation similar to that which amendment No. 43 would create? Rightly or wrongly, there have been concerns about the BBC competing improperly and about cross-funding with public money, namely the licence fee. A recent example that has been brought to everyone's attention is that of the History Channel saying that UK History, which is a joint venture by the BBC and Flextech, improperly uses programming within the BBC archive, paid by the licence fee, to support a programme channel that is supported by advertising and is in direct competition with private companies such as the History Channel. I do not agree with that argument, but I believe that the principle of the amendment should be enshrined in the clause.

Andrew Lansley: My hon. Friend makes a good point worthy of discussion, but if his point were proven in the terms in which he describes it, in my view that would be a case for action under competition powers rather than under the fair trading commitment. That is not to say that the fair trading commitment does not embrace such matters; however, the fair trading commitment is merely the BBC board of governors' expression of how it intends to meet its competition
 obligations. If there were cross-subsidy between licence-fee funded activity and commercial activity in a form that could give rise to a distortion of competition, that would be a proper cause of action by Ofcom under its competition powers, and those powers are already available to Ofcom under the Bill. In that sense, I want to part the issue of competition. I do not think that the question of whether Ofcom is able to regulate the BBC's activities in relation to competition is a deficiency. The issues are wider, and are principally to do with the public service remit of the BBC and how that is regulated.
 My main point relates to the structure of the legislation and an anomaly that arises from the following fact: Ofcom has a responsibility under tier 3 to consider the public service obligations as a whole, and should examine regularly the extent to which each of the public service broadcasters contributes successfully to the achievement of the public service obligations. It should make recommendations and comments on that, too. However, there is a substantial distinction in the way in which public service broadcasters other than the BBC are required to respond to Ofcom's recommendations. If they do not satisfactorily amend their statements of programming or their programming activity to meet public service obligations, Ofcom has powers to act. It seems that the BBC is required, under the agreement, to consider Ofcom's recommendations. I do not know to what extent we attach significance to them, but I detected differences in drafting between the way in which the agreement expresses such matters and the Bill's description of them. For example, under section 5(c)(3) of the amendments to the agreement, the corporation is required to consider the guidance given by Ofcom and the reports that were previously published, as distinct from the requirement to take account of them under clause 258. If I were a lawyer, I am sure that I would note a difference between those two conditions. 
 It is interesting—[Interruption.] I am glad that the hon. Member for Ellesmere Port and Neston (Mr. Miller) is staying with me. At least someone is. I refer to another difference between section 5(c)(3) of the amendments to the agreement and the Bill. Under clause 258(4)(c), other public service broadcasters are required to 
''take special account of the most recent such reports'' 
published by Ofcom under clauses 256 and 344. However, under the amendments to the agreement, the BBC is technically required merely to consider the reports previously published by Ofcom without specific reference in the most recent reports or to any requirement to take special account. That is slightly surprising, given that the intention of the draft amendments was precisely to reflect in the agreement the obligations that were placed on other public service broadcasters under the Bill. Perhaps we shall find out the reason for such a difference when the Minister responds. It is not my principal argument, but I wanted to illustrate the extent to which there is scope for differences between the agreement and the BBC, 
 and the impact of the Bill as it affects other public service broadcasters. 
 Far more significant is section 13(b)(2) of the agreement, which is itself subject to the approval of the Secretary of State under article 3(b) of the charter or conditions under article 24(1) of the royal charter relating to the public television services that have been approved. That points to the reflection in the agreement of the fact that the so-called backstop powers to lay conditions and to require the BBC to comply with the public service obligations as seen by Ofcom lie not with Ofcom, but the Secretary of State. The Government claim that that is necessary because of the special character of the BBC. I am not worried that that will give rise to a proper recognition of the BBC's character, but that it will lead over time to increasing risks of a divergence between the BBC's interpretation of its proper role in the public service broadcasting ecology and Ofcom's view. Therein lies the danger. 
 There is every reason for the BBC and other public service broadcasters to be subject to Ofcom's overall view about the structure of public service obligations and how the respective public service broadcasters can meet them. It will be difficult enough for Ofcom with the frequency with which it will review the position in fast- changing public service broadcasting activity to be able to keep up with the ways in which the BBC may change how it discharges its broadcasting obligations. 
 How do we go about things then? It would be temping to say that, at this stage, we should rewrite the Bill so that the BBC is put under Ofcom for tier 3 purposes. I have resisted that temptation, perhaps because I am a ''small c'' conservative as well as ''large c'' Conservative, but it seems to me that the purpose of the BBC charter is to provide assurances—until the charter expires at the end of 2006. It is intended that there should be benefits associated with avoiding Parliament's desire to micro-manage the structure of the BBC and in allowing it to operate substantially independently, except where we require it not to do that. Let us work within the structure of the Bill and the structure of charter renewal. However, we must also ensure that there is no risk that our intentions could be frustrated, in two or three years time, or at some subsequent charter renewal, because we did not future-proof the Bill against the intentions of Parliament. 
 If we do not make amendment No. 22, there is a risk that that might happen. Under the charter, the BBC might not make all the agreements that are required, or may be required in future, to hold it to its public service obligations. It would have the freedom to avoid making those agreements. The will of Parliament might be frustrated thereby. I want to future-proof the Bill. I want to do the things that the Government say they want to do. They say that they do not want to pre-empt charter renewal. The best way to do that is to enable changes in the charter to give rise to functions for Ofcom. Perhaps the best example of that would be if back-stop powers, such as the approval of television services, were to be transferred 
 from the Secretary of State to Ofcom. It seems more likely that such a thing would be done through the charter than through the agreement or subsequent agreements. It would, therefore, be desirable if clause 193 referred specifically to the functions of Ofcom that are required in the charter. 
 I am contemplating a direction that is not purely theoretical, but practical in relation to the next charter renewal. During proceedings on the Bill, there is a great temptation to debate the structure of the BBC after charter renewal in 2006. That might seem premature, but it is not. We should not to try to decide what the charter should say about the BBC, but we should be aware of how the BBC might change in three or four years' time, and after the next charter. 
 What is pointing us in such a direction? The BBC and its board of governors have recognised the nature of the difficulty that everyone, including politicians, has distinguishing between the board of governors and the management and executive. If we cannot be confident that the BBC board of governors is independent and able to regulate the executive and the management, the BBC's regulatory structure falls down. That is precisely why the BBC has introduced some of the changes reflected in recent documents, such as ''BBC Governance in the Ofcom Age'', which is especially relevant. That is, however, a halfway house. 
 It seems perfectly obvious that the BBC board of governors has won a degree of independence that would not be recognised as sufficient in the outside world or by other broadcasters. The problem is that, when the BBC is approached by individuals or other broadcasters who have complaints or grievances, its explanations and responses often simply reinforce the view in the minds of the complainants that it is an organisation of which the governors are the showcase, rather than the independent regulators. 
 If the BBC's governors are to be independent from the BBC, they must be more so. We should begin to contemplate whether the charter should set up a structure for the corporation in which there are two entirely distinct entities related to the different functions of acquiring and spending the licence fee, and providing high-quality broadcasting services. Those two functions should not be regarded as being performed by only one organisation. The board of governors should be the trustees of the licence fee, the purpose of which—as the Secretary of State put it—is to provide 
''venture capital for the nation's creativity''.—[Official Report, 3 December 2002; Vol. 395, c. 787.]
 New clause 29, which was tabled by my hon. Friends, points us in that direction. 
 If the licence fee is venture capital for the nation's creativity, it should be acknowledged that the nation's creativity is not confined to the BBC, but spreads wider than that. One cannot fund the nation's creativity simply through the offices of the BBC, or even through its procurement of independent programming and supply. We must therefore contemplate whether the use of licence fee resources should be spread wider than the BBC. That fits neatly 
 with an argument that I have presented elsewhere: it is fine for the BBC board of governors to have responsibility for the licence fee and to use that overwhelmingly to procure the networks and services of the BBC, but it should not be required to do solely that. It should be free to do other things that are consistent with stimulating creativity, innovation and quality in broadcasting services and with the objectives of public service broadcasting. 
 However, one cannot be both the purchaser and the regulator of services. There is a clear distinction between the role of the BBC board of governors to spend the licence fee and buy services and promote high-quality broadcasting and Ofcom's function to act as an independent regulator, which would enable it to provide a structure of public service obligations to which it responds.

Peter Atkinson: Order. The hon. Gentleman is trespassing on to the subject of public service funding. That is addressed in new clause 30, which is not grouped with the amendments that we are discussing.

Andrew Lansley: You are very kind to correct me, Mr. Atkinson. I was thinking about this matter either too early this morning or too late last night, so you may well be right.

Peter Atkinson: I am right.

Andrew Lansley: In any case, Mr. Atkinson, you will understand that my purpose is to reflect the structure of the argument relating to charter renewal.

Peter Atkinson: Just to make things clear to the hon. Gentleman, I am simply issuing a warning shot. He should not start to trespass on to the subject of funding, which is addressed in new clause 30, not in new clause 29. I understand the case that he is trying to make, but it would be helpful if he were to confine his comments to the new clauses that have been selected.

Andrew Lansley: Thank you, Mr. Atkinson. I understand what you mean. I was trying to move back within order, and I will try again to do so now.
 My intention was simply to say that in charter renewal there is every prospect that—for reasons to which I referred but will not go on about—the roles of the BBC board of governors and Ofcom might be distinguished. The BBC board of governors now exercises third-tier responsibilities in respect of matters such as due impartiality and accuracy and the other things that were left out in the agreement from the list in clause 307. Clause 307, which is about applicable programme standards, mentions ''due impartiality'', ''due accuracy'' in news and matters relating to sponsorship and advertising. Those things are regulated not by Ofcom but by the BBC. 
 It is clear that the board of governors will no longer have that role in relation to third-tier responsibilities, and the Secretary of State will not necessarily have some of the back-stop powers, including the approval of services, that are currently included in the charter. Those powers would more appropriately be given to Ofcom. If that is the case, and if the charter is to contemplate major restructuring of the BBC and of the 
 responsibilities of the board of governors, it seems excessive to rely on the agreement to achieve that. 
 In 2006, when we are in the midst of charter renewal and those issues are being discussed, a major change may be being contemplated. However, it will be perfectly clear that that change cannot be accomplished without new statutory provision. Another Broadcasting Act will be required. I was not present for the passage of the Broadcasting Act 1996, but other members of the Committee were. As I understand it, one of our objectives in considering this Bill is to ensure that another Broadcasting Act is not required in three or four years' time. It has been six and a bit years since the last one and, if we get this Bill right, it should be a good deal longer before the next one. 
 If we get the structure of this legislation right, it will be sufficiently flexible to take account of charter renewal. If there might be a major change in the charter that would otherwise require changes to the statutes to give power to Ofcom, it seems to me that it would be far better if the legislation that we are dealing with now allowed for the charter itself to give functions to Ofcom in relation to the BBC. That is entirely consistent with the Government's argument that we want to be flexible and not pre-empt charter renewal. 
 I am coming to the same conclusion from a different direction. The Government are saying that we should not pre-empt charter renewal by thinking about charter renewal. I am saying that we should not pre-empt charter renewal but that it is necessary to think about it. We have to think radically about it if we are to anticipate what might happen. The best way of drafting legislation is always to think of the exceptional cases and the more radical future changes. That will allow us to get the degree of flexibility right. 
 Although amendment No. 22 appears opaque—as most of my amendments do—I think that it serves a valuable purpose and will allow the legislation to be sustained through the next charter renewal, not fall at that first hurdle.

John Whittingdale: I begin by congratulating my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on the reasonable and persuasive way in which he moved his amendment. The Bill commands support on both sides of the House, as has been demonstrated on Second Reading and during many of our Committee proceedings to date. However, if there is one issue that gives rise to great disagreement between the parties, it is the BBC. There are various ways in which to address the problem that we have identified—that the BBC is to be outside the full extent of regulation by Ofcom. My hon. Friend has advanced one of those ways in amendment No. 22, and several other Opposition amendments have been grouped with it. The overall intention of the amendments is to subject the BBC to the same external scrutiny and regulation as other broadcasters will be subjected to as a result of the Bill being passed.
 I should spend a little time outlining the purpose of each of the amendments that we have tabled. Amendment No. 43 deals with the BBC's fair trading commitment. My hon. Friend is right that the fair trading commitment represents just one aspect of the BBC's activities. The amendment would focus Ofcom's role of examining the BBC on a particular area of activity that might give it undue prominence. I therefore accept my hon. Friend's argument that amendment No. 43 on its own is insufficient. 
 Nevertheless, amendment No. 43 addresses a specific concern, and one that has been growing in recent months. A vast number of new BBC services have been launched—new television channels and radio stations, and extensions into internet publishing. Each such launch has given rise to concern that the BBC—with the enormous resources at its disposal and the strength of its name—will provide unfair competition to existing commercial operators who are already supplying the market that the BBC is seeking to move into.

Brian White: Is the hon. Gentleman saying that there should not be UK History as well as the History Channel? Is not the fact that there are two of them proof that there is competition in that market?

John Whittingdale: I want to come on to examine each of the various new services that have given rise to concern. However, the hon. Gentleman has mentioned one of them, I am saying that the decision about whether the launch of UK History will provide the consumer with additional services and is a worthwhile use of the BBC's activities should be subjected to some kind of external regulation. The debate about whether it is appropriate is interesting, and it is inevitable that it will creep into our discussion. However, we are currently addressing whether the existing mechanism for examining applications by the BBC for new services is sufficient, and whether it is likely to produce confidence among the commercial providers that those new BBC services are not going to offer unfair competition. Our view is that the existing mechanism is deficient and that it does not afford such confidence to commercial operators. This matter is now generating widespread concern right across the board among all those who are commercially involved in publishing, broadcasting and the provision of communication services.
 As my hon. Friend the Member for South Cambridgeshire said, amendment No. 43 is focused on the BBC's fair trading commitment. That commitment is a robust statement: it sets out specific requirements with regard to the BBC's commercial activities that are designed to ensure that it does not put the licence fee at risk or compete unfairly with its commercial competitors. We welcome that commitment, but we feel that it is deficient in the area of the enforcement and adjudication of complaints. It is extraordinary that this legislation will mean that decisions about whether the BBC has abided by the terms of its fair trading commitment will still ultimately rest with the BBC itself. 
 There is now a widespread view that the BBC board of governors has failed to enforce the fair trading commitment and that there must be an independent arbiter who is seen to act impartially—and who is not part of the organisation against which a complaint has been made.

Kim Howells: I am sure that the hon. Gentleman is aware that there have been attempts to challenge the BBC's right to become involved in some of the new services that he has mentioned. In 1997, BSkyB challenged the right of the BBC to use licence payers' money for BBC News 24 under the terms of the European treaty. The court found that the BBC was entitled to use that money. The hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) already mentioned the various competition agencies: why are they not sufficient to ensure that the BBC acts properly in terms of competition rules and law?

John Whittingdale: Just because something happens not to be in breach of European law does not necessarily mean that it is right. The hon. Gentleman is correct. There are other safeguards in terms of both European law and competition and fair trading legislation. The BBC has made the case vigorously that, like every other broadcaster, it is subject to scrutiny by the competition authorities. That is correct. The fair trading commitment imposes obligations on the BBC that go beyond those contained in competition legislation. It is quite possible that the BBC may not be in breach of competition legislation, but it may be breaching the terms of its fair trading commitment. That area is the most difficult to arbitrate and there needs to be some kind of independent scrutiny. Many of the complaints that are being made by a variety of independent commercial organisations lie in that area.
 BBC News 24 is an interesting example. The hon. Gentleman is quite right that it was found not to be in breach of EU law. That is not to say that News 24 has not raised some serious questions. That became very apparent when the Secretary of State commissioned Richard Lambert to carry out an independent review of its operation. That in itself raised serious questions. I should like to come back to the question of BBC News 24 because it is another example of a news service provided by the BBC, which has led to concerns about the impact it has had on existing commercial services.

Simon Thomas: Before the hon. Gentleman moves on, would he like to reflect on what he has just been saying about the fair trade commitment with the BBC? He is seeking to set a standard that he is not applying to other broadcasters. The Bill would create a sort of Murdoch Channel Five link-up, which I cannot see following any fair trade standards as are now set out in the BBC's voluntary charter. Would he also accept that there is now independent scrutiny? Independent auditors now report directly to the governors within that framework. Have there not therefore been improvements within the BBC on the workings of its fair trade commitment?

John Whittingdale: The hon. Gentleman says that I
 am trying to impose a higher more demanding standard on the BBC than that which applies to other broadcasters. Absolutely. The BBC takes £2.5 billion of public money, which is not available to other broadcasters. The justification for having a state-funded, state-licensed BBC should be that it provides services that are not otherwise available in the commercial sector. That justification needs to be constantly examined. If, as is now happening, the BBC is extending its activities into areas that are already served—not just could be served—by commercial broadcasters, it raises strong grounds for concern. Yes, of course the BBC should be subject to much stricter safeguards than other broadcasters. That is the price it must pay for the fact that it enjoys £2.5 billion of public money raised by criminal sanction through the licence fee. I make no apology for that.

Kim Howells: Criminal sanction?

John Whittingdale: The Minister expresses some surprise when I say criminal sanction, but I invite him to visit some of the people who are currently in prison because they did not pay their licence fee. They understand what I mean by criminal sanction.

Andrew Lansley: I entirely accept the point my hon. Friend makes. But is there not a risk associated with adopting the fair trading commitment as the basis for Ofcom's regulatory oversight? In fact, the fair trading commitment includes provisions concerning how the BBC brand is used. That would seem to be integral to the management of the BBC and its oversight by the board, rather than something that should be dealt with by an external regulator. The problem is that the BBC has lumped some things together under fair trading that are probably the subject of regulatory oversight and some that are properly the function of the BBC.

John Whittingdale: I am not sure whether I go along with my hon. Friend the Member for South Cambridgeshire. The BBC brand is an enormously powerful emblem to attach to a product. One comes across that brand in all sorts of curious places. For example, if one buys compilation albums of recent chart hits, one will find that the BBC has its own branded series of albums that are based on ''Top of the Pops'', which compete directly with the Now series and the Hits 2002 series. Is that a proper use of the BBC's resources and should the BBC be competing in that market? The BBC has an asset in ''Top of the Pops'' and it is right to exploit that to get value, but whether the BBC needs to be as involved in the publication as it is, or whether it could make that asset available, is an interesting question. I am unhappy that such questions should rest with the management of the BBC, because it is giving rise to concern among commercial producers who offer competing products.

Richard Allan: I am not sure that the BBC's ''Top of the Pops'' albums are something new. The BBC used to make those when records were black vinyl things.

John Whittingdale: The hon. Gentleman is entirely right. I have some of those black vinyl things and the ''Top of the Pops'' greatest hits 1973 nestles
 somewhere at the back of my record collection. I accept that in some ways that activity is not new. However, that is not to say that that should not be subject to some scrutiny, since rival commercial products have arrived more recently. Just because the BBC has always done something, that alone is not a justification for it to continue. If it becomes apparent that the commercial sector is capable of providing services, I do not see why the BBC should not withdraw gracefully and say, ''This is no longer a public service remit, since the commercial sector is able supply it and we should, perhaps, reconsider.'' I digress. I have not begun my speech. I will speak to the specific new clauses that we have tabled before I move on to some of the specific examples that hon. Members are already tempting me to discuss.
 New clause 18 would cover the BBC's statements of programme policy. It is intended that Ofcom should be able to monitor the BBC's public service promises and how those are delivered, so that it can fulfil the duty, which is imposed on it under clause 3, to secure a wide range of quality broadcasting services. The new clause concerns the publication of annual statements of programme policy and annual reviews. As a part of the third tier self-regulatory arrangements, the Bill currently provides for the licensed public service broadcasters—ITV, Channel 4 and Channel Five—to publish annual statements that set out how they intend to deliver their public service remits. We will debate that later on. The new clause also requires that there should be annual reviews that report on how actual performance has matched the promises made. In anticipation of that requirement, the commercial public service broadcasters—Channels 3, 4 and Five—have been producing statements and reviews since 2001. The Bill gives Ofcom powers to act if statements propose any ''significant'' change to the service that might affect the quality or quantity of the public service programmes that are provided. Ofcom will have the power to direct the broadcaster to restore missing promises to ensure that there is no dilution of the public service remit over time. However, the Bill provides no comparable requirement for the BBC to do any of those things. 
 The Government have published the revised BBC agreement, which covers the necessity of statements and reviews, but it is not as stringent a requirement as would result if the responsibility were given to Ofcom. The Government have also accepted the recommendation of the scrutiny Committee that the agreement should relate to individual services and not only to the corporation's domestic services as a whole. That is welcome. As a result, the BBC has voluntarily begun to issue statements of programme policy, although we await a review of whether promises have been delivered. There is still a huge anomaly, however, between the regime of scrutiny for the BBC and that which will apply to the other public service broadcasters. 
 Ofcom has a back-stop power to ensure that the public service output of the commercial channels 
 cannot be materially altered over time. That is a useful safeguard, and it is curious that there is no comparable statutory provision covering the public service remits of the BBC channels. Indeed, the BBC should be subject to regulatory requirements at least as strong as those that apply to commercial broadcasters. Public service broadcasting is the BBC's raison d'être. If it is beginning to dilute its commitment to public service broadcasting—that it is doing so is a widely held belief—that is grounds for real concern and makes it imperative to have some external scrutiny to arbitrate on such matters. 
 We must carefully examine the role of the BBC's governors. Under both the existing regime and that introduced by the Bill, the governors are still asked to ensure that the remit is met and to scrutinise the BBC's output to ensure that it delivers on its promises. In a modern multi-channel system, it is indefensible that we still expect the BBC to act as judge and jury on complaints against it. Some degree of independent scrutiny must be introduced. 
 To digress slightly, the hon. Member for Ceredigion (Mr. Thomas) mentioned external auditing. There has been some movement in that direction, but it has not been sufficient. I will not be tempted to discuss another new clause that we have tabled, but we will seek to amend the Bill to have the BBC come under the scrutiny of the National Audit Office—a suggestion that has received wide all-party support. I hope that the hon. Gentleman will support that measure at the appropriate stage. 
 The purpose of new clause 18 is to make it a statutory requirement that the BBC agreement provision on statements and reviews reflect the obligations that will be imposed on other broadcasters as part of the Bill. Specifically, the statements and reviews must relate to the BBC's individual services. Annual statements must show how the BBC's public service role and specific charter and agreement obligations will be fulfilled. If any significant change is proposed, Ofcom should be consulted and its opinions taken into account. If that does not happen, Ofcom should have the power to direct the BBC to revise its proposals accordingly. The criteria for significant change must be the same as those that are to be applied to other broadcasters under the Bill. 
 Some people would say that the existing regulatory regime has worked well and that it is unnecessary to bring in extra obligations. However, to date, the record of the BBC governors does not inspire confidence. Some of the statements that have appeared in the governors' contributions to the annual report have not been particularly stringent in their analysis, nor have they been critical of the services overseas that they are responsible for overseeing, even when a huge variety of outside observers are expressing increasing concern about whether the BBC is still delivering the high-quality public service programming that it was set up to deliver. 
 Mention has already been made about BBC News 24. The Secretary of State was sufficiently concerned that she felt it necessary to ask an independent outside 
 examiner to look into the BBC's record in the provision of BBC News 24. If the Secretary of State considered that worry about the channel was sufficiently important to appoint an outside arbiter to undertake an investigation, it is not entirely clear why that argument should not apply to the other activities of the BBC. We want a permanent Richard Lambert in the form of Ofcom to carry out such scrutiny to ensure that there is no unfair trading and no breach of the public service remit, and to increase generally the confidence that is lacking in the current regulatory regime.

Michael Fabricant: If the amendment and new clause were accepted, does my hon. Friend agree that it would not be the role of Ofcom to micro-manage? The Richard Lambert suggestion regarding breaking news was an example of that.

John Whittingdale: No, it would not be the job of Ofcom to micro-manage. Such matters should be conducted as part of the annual review. While we have said that it should look at individual services, it must have a view of the entire output of the BBC to see whether it matches the policies and delivers the public service remit. On top of that, there is a role whereby individual services should be examined specifically if they cause worries about unfair competition.
 It is worth our considering some of conclusions reached by Richard Lambert in his report. He said that, for a service that has already cost the licence fee payer £220 million and, which even now still has an unclear public service brief, BBC News 24 seems to have attracted only ''perfunctory'' attention from the governors in successive annual reports. He points to the central paradox in the role of the BBC governors, which makes their position untenable. He said in his report: 
''On the one hand, they are the main instrument by which the BBC is rendered accountable. On the other, they are often regarded''—
 now comes the point made by my hon. Friend the Member for South Cambridgeshire— 
''as part of the management of the Corporation. When it comes to News 24, the Governors seem to have put themselves in the latter category.''
 Many people would consider that the governors are often regarded as much more a part of the overall management structure—not only of BBC News 24—than the independent scrutineers and arbiters that are so necessary. As a result, they have not always delivered on the requirement to protect the public interest. 
 In the past two years, there have been a number of doubtful programme developments on the main BBC television services. We have talked about new services and some of the channels being launched on digital television, but some of what has been happening on the main analogue BBC 1 and BBC 2 television channels is giving rise to real concern. I do not want to spend too long on the subject, but an important part of the regulation of the BBC relates to whether it is delivering on its public service remit. As my hon. Friend the Member for South Cambridgeshire says, that issue is not covered in the Bill, yet there is a growing chorus of concern about dumbing down. 
 Of course the BBC should not seek to provide ghetto programmes deliberately created to attract the minimum of viewers. It needs to concentrate on providing high quality public service programming that is likely to inspire an interest in a large number of viewers. However, there seems to have been a reduction in programmes on many of the subjects that people regard as core to public service broadcasting, such as current affairs, news, documentaries, and arts. 
 The Minister for Tourism, Film and Broadcasting has expressed some trenchant views on the state of art in this country, and a lot of us rather applaud those views, but if people are to have the opportunity to make a judgment about controversial artistic works, it is important that the main public service broadcaster shows programmes that enable them to do so. I shall quote two of our most distinguished arts broadcasters. Joan Bakewell recently said: 
''There used to be lots of arts around on major channels. There isn't now. That's clearly the case. When they put arts on BBC One, it's Sister Wendy and Rolf Harris. It's like further education with a popular teacher. It isn't a place you go for intellectual enlightenment. That's putting it kindly.''
 Sir Jonathan Miller, with whom I do not always agree, although in this case he has a point, said: 
''Unless you have a programme about how to decorate your house or chop up vegetables, it is impossible to get anyone in the BBC to commission your programme.''
 We have to take that concern seriously. I have mentioned two distinguished figures in the arts world who are very critical of the extent to which arts programming is diminishing on the main public service broadcaster. One need only consider the fate of ''Omnibus'' to understand that it is diminishing. 
 As for current affairs programmes, one could lapse into nostalgia on the subject. ''Weekend World'' and ''World in Action'' were some of the great names that come to mind when one considers current affairs programming on the BBC—

Kim Howells: They are all in the Lords!

John Whittingdale: They are, and most of them are sitting on the Labour Benches. That is a sign of the high regard that the Government have held for such programmes. It is hard to say that the current affairs output of the BBC is of similar quality—one has to look very hard to find such quality now. ''Panorama'' is still good and sometimes produces authoritative investigative journalistic programmes, although sometimes it does not. Although it is clearly the flagship current affairs programme, it has been relegated to late on Sunday night. I consider myself a current affairs junkie, but I have to work pretty hard to work up enough enthusiasm to switch on ''Panorama'' at 10.30 pm on a Sunday.

Richard Allan: The hon. Gentleman has just made an important point. Comparing the way in which the BBC functions with how its commercial competitors do, he listed two current affairs programmes that were both on ITV and have now gone. The one current affairs programme that he names that is still running is on the BBC. Perhaps it is not on at an ideal time, but the BBC has maintained its flagship current affairs programme, whereas the independents have lost theirs.

John Whittingdale: The hon. Gentleman is correct in pointing out that those two were flagship programmes for Granada. My point was that current affairs generally seem to be worse served today than they were some time ago. The BBC has the prime responsibility for that, although the ITV channels still have a public service remit, which we shall consider later. Indeed, the fact that we shall have a specific opportunity to discuss the public service remit in the Bill as it applies to Channel 3, but no opportunity other than this to talk about the BBC is itself significant.
 Although ''Panorama'' still exists in name, many people would point to the prominence that it now has compared to the prominence that it had previously, and to the quality of some of its reports. There has been a considerable reduction on what once existed. The fate of the main evening news is relevant, too. I could never quite understand why the BBC chose to move its news so that it clashed directly with the main commercial channel's news. That was carried out at very short notice, and broadcasting the two main channels' news bulletins simultaneously cannot have been in the interests of promoting greater understanding and interest in news and current affairs among the public.

John Greenway: Does my hon. Friend agree that the debate is really about the fact that there was virtually no public debate on the governors' decision to sanction moving the news from 9 o'clock to 10 o'clock? In contrast, there was a massive public debate about moving ''News at Ten'' on ITV to 11 o'clock and then back to 10 o'clock, simply because the Independent Television Commission had powers that clearly did not exist in respect of the BBC. Is not that the issue that we are trying to address with the new clauses?

Peter Atkinson: Order. Before the hon. Member for Maldon and East Chelmsford replies, I must warn the Committee that the debate on the examples is in danger of overtaking the debate on the substance.

John Whittingdale: I take your warning, Mr. Atkinson, but it is difficult to debate why the BBC should come under Ofcom without pointing to some of the consequences of recent decisions that have been taken without an independent arbiter. I hope that you will accept that I am not deliberately straying from my amendments. I regard these arguments as central in terms of why the amendments are necessary.
 The point raised by my hon. Friend the Member for Ryedale (Mr. Greenway) was entirely right. He referred to the governors' decision to sanction moving the main evening news bulletin. The fact that they did not say anything could be taken as their agreement, but it seems extraordinary, as my hon. Friend suggests, that that decision went through on the nod, although the decision about the ITV news provoked considerable public debate.

John Greenway: And a Select Committee inquiry.

John Whittingdale: Indeed.
 There is a real danger that the rest of the Committee stage will be taken up with debating my next point, but there is great strength of feeling in the House about the BBC's coverage of Parliament and politics generally. I have received assurances from the head of news and current affairs—as, I am sure, have other hon. Members—that the new BBC political programmes will offer at least as much coverage as those that went before. However, many of us regret the passing of ''On the Record'' and ''Despatch Box'', and we will look with a critical eye at some of those new programmes. The idea that politics can be lumped into a slot late on Thursday night and that that somehow delivers the BBC's political remit raises real concern.

Brian White: Is not the hon. Gentleman falling into the trap of assuming that our values in this place are the values of most people outside? One reason why politicians and politics have fallen into disrepute is that we carry on pretending that there was a golden age of ''Panorama'' and other current affairs broadcasting, rather than dealing with real issues and real people outside.

John Whittingdale: As I said, there is a danger that we shall get into a debate about the role of the coverage of Parliament and similar issues, but I shall resist that temptation. Yes, political programming must be relevant and interesting, but it is a retrograde step to conclude that that can be achieved only by not showing the men in grey suits who have been elected to the Westminster Parliament and by substituting for them the stars of stage and screen giving their political views.
 Part of the BBC's job is to make Parliament interesting, and to persuade people that what happens in this place matters and that they should take account of what is said during debates and of what happens during our proceedings. Simply saying that nobody is interested in Parliament anymore is a desperately defeatist view and I hope that that is not the case; I do not believe that it is. The BBC cannot fail to be aware of concerns. It has heard them from almost every hon. Member because all of us have an interest in ensuring that our proceedings receive proper coverage. We shall look critically at the BBC's political coverage during the next few months to try to ensure that its prominence is not reduced.

Andrew Lansley: My hon. Friend's examples work well to illustrate a particular argument, especially those examples relating to changes concerning the evening news programmes. They illustrate that amendments do not bite on such issues concerning approvals of, or changes to, services because those issues are covered by the charter and by the Secretary of State. My hon. Friend illustrates the discontinuity between how we might change the regulatory structure of the Independent Television Commission carried forward into Ofcom and the regulatory oversight of the Secretary of State. Those things are substantially different. We will not be able to influence such changes of services unless we reach back into the charter, either in the way in which my hon. Friend proposes or the way in which I do.

John Whittingdale: My hon. Friend uses my argument to promote his amendment. I have huge
 sympathy with his amendment. All the amendments in the group are designed to achieve the same overall objective; to bring the BBC's activities under external scrutiny and independent monitoring, which does not currently exist. I do not hesitate to support his amendment to give Ofcom a remit in the delivery of the BBC charter, and I hope that he will support our amendments in the same way.
 I have talked mainly about mainstream BBC activities but it is relevant to examine other services, and especially digital services.

Simon Thomas: I am sure that the hon. Gentleman has struck a chord with several people by bemoaning what has happened to the BBC during the past few years. Will he reflect that the BBC is governed by its governors, who are appointed by the Secretary of State? He seems to have little faith in that body of people and wants to replace it with Ofcom, which is also a body of people appointed by the Secretary of State. What credibility has the suggestion that Ofcom will be more amenable to his views on the BBC than the present BBC board of governors? In fact, I would have thought that the present BBC board of governors has views closer to his than those of the new Ofcom body.

John Whittingdale: Obviously, to some extent, we have to rest on the competence and independence of the appointees to Ofcom. The difference is that people who represent Ofcom are outside the BBC. A large part of the problem arises from the dual role of BBC governors. On the one hand, they are supposed to be external scrutineers and arbiters of complaints, but on the other hand they are the senior management tier of the BBC. There is a fundamental conflict between those roles. That should be addressed and that is why I would welcome scrutiny by an independent body as a significant improvement to the current regime; although, admittedly, that body would still be made up of appointees of the Secretary of State.
 I want to say a little about several new services that have been launched recently. The BBC has been accused by several people in the industry of using the licence fee for services that are not universally available because they go out on digital only, and that those could be provided as easily by the commercial sector. The public service value of the new BBC 3, which is supposedly a youth channel, was somewhat unclear to begin with, and the Secretary of State initially withheld her approval until the BBC gave greater assurances that the channel would be distinctive and not simply replicate existing services. There are still concerns that BBC 3 looks awfully like some of what Channel 4 and E4 currently produce. I wonder whether, when the Secretary of State approved the channel, she knew that BBC intended to show ''EastEnders'' on BBC 3 24 hours before it was on the main channel, and therefore only to the minority who had access to digital television.

Michael Fabricant: I sympathise and agree with the general thrust of my hon. Friend's comments. However, he must forgive me, but following his argument, would he say that it was wrong to launch colour television on BBC 2 when at the time BBC 2
 was available only to a small number of viewers? If it is not started somewhere, it will never take off.

John Whittingdale: My hon. Friend is right. That is a crucial question, but the question is whether BBC 3 is starting anything new and innovative or is simply replicating something that already exists and is provided by a commercial channel. The Secretary of State was right to impose strict requirements on the BBC to ensure that BBC 3 was going to be new and innovative and a demonstration of public service broadcasting. However, my hon. Friend should understand that some are still concerned about whether it is doing that, especially considering what we are seeing in BBC 3's schedules; that includes the example of ''EastEnders'', which could hardly be described as new. I should be interested to know whether that aspect of programming policy was debated in the Secretary of State's discussions with the BBC on the launch of BBC 3 or whether she discovered it by reading the newspapers a few weeks after she approved BBC 3, as did the rest of us.

Andrew Robathan: My hon. Friend says that ''EastEnders'' is not new. I do not know whether he has ever watched it, but I have. It is certainly not innovative, so does he think that the BBC is demonstrating a public service by broadcasting it?

John Whittingdale: Actually, often yes. I am not as a devoted viewer of ''EastEnders'' as I would perhaps like to be, although the new sitting hours may give us an additional opportunity to rush home to watch it. My hon. Friend should know that I recently participated in a competition with five other hon. Members, which was organised by the ''PM'' radio programme. We were asked whether we could recognise various celebrities who appeared on television, and I was the only one who knew who Little Mo was. My ''EastEnders'' credentials are pretty good, and I think that the programme often represents high-quality public service programming and sometimes gets flak unfairly. If I made up a list of BBC programmes that were a long way from public service broadcasting, ''EastEnders'' would not be high on it.
 I am happy to defend ''EastEnders'', but I do not want to be diverted too much from the main thrust of my remarks. We need to consider the current regulatory regime. Certainly, the existing requirements are failing to inspire confidence. As for compromising the role of the governors, the amendment is designed to help them by clarifying what is, at the moment, a terribly ambiguous role. The point of the amendment is not to remove all responsibility from the governors; they will still have an important job as trustees of the public interest at the highest level within the BBC. However, it is unreasonable to continue to expect the governors to act as the BBC's defendant, judge and jury when it comes to assessing how well the BBC is measuring up to its remit. That has to be the job of an outside regulator with a duty to survey the whole of the public service terrain. 
 That is the purpose of new clause 18. It would allow Ofcom to do its job properly, and allow the corporation to stay at arm's length from the Government, which we agree is desirable. At the moment, the Secretary of State has to carry out a lot of the requirements that we would like to be passed to Ofcom. Giving the responsibility to Ofcom would add to the safeguards ensuring that there is no undue interference from Ministers in the activities of the BBC. It would increase public confidence if the BBC's public service remit were protected both by the governors internally and by a degree of outside scrutiny.

Kim Howells: I have been listening fascinated to that tremendous defence of heavily regulated public service broadcasting. From the point of view of someone who believes in competition as a major element in all that, may I ask the hon. Gentleman what role the BBC governors would have in the scenario that he has painted for us?

John Whittingdale: They would, I hope, be internal regulators monitoring the activity of the BBC. They would flag up concerns and try to ensure that people did not have grounds to complain to the external regulator.
 The BBC's case is a bit like that of British Telecom. Clearly, British Telecom needs a very strong chairman and board to oversee its activities, but that is not to say that it should not also be subject to a degree of external regulation. We spent some time talking about British Telecom in our discussions on the earlier half of the Bill. The parallel is quite close. If the provisions in the second half of the Bill, which is to do with broadcasting, were applied in the first half of the Bill, the effect would be that Ofcom would regulate all the mobile telephone companies and all the alternative fixed-line providers such as Colt, Thus and Energis, but the biggest player in the market, British Telecom, would be wholly outside the scope of the regulator. That is clearly ridiculous, both for telecoms and broadcasting. 
 I have talked about new clause 18. I shall now move on to new clause 19, which is complementary to new clause 18. New clause 19 would give Ofcom a formal role in the approval and monitoring processes for applications for new BBC services. It would give Ofcom the ability to comment on significant changes made to long-standing BBC services such as BBC 1 and BBC 2. Given the complexity of the BBC's status under the royal charter, the Secretary of State will retain final responsibility for approving new services and changes to existing services. 
 However, it seems sensible that, before approval is given by the Secretary of State, Ofcom should be obliged to: prepare and publish a report commenting on whether the proposed service would, for example, be compatible with the BBC's primary public service role as set out in the charter and the agreement; say whether the new service would provide a level of value to the public proportionate to its likely impact on the 
 market; say whether the service would be universally accessible and free at the point of use within a reasonable period; and say whether it would represent value for licence fee payers. New clause 19 would also give Ofcom a duty to review from time to time the performance of new or altered BBC services to ensure that they continue to comply with the terms of the approval that was granted by the Secretary of State. 
 As I said, the clamour of concern about some recently launched BBC services has grown louder and louder. Those new services have come about because of digital technology and because the Government decided to allow the BBC an exceptional and extremely substantial increase in the licence fee to fund a massive digital expansion. As a result, the number of BBC services has risen in the past few years from two television channels and four radio stations, as well as the local network, to eight core television channels and eleven national radio stations—not to mention the BBC's expansion into online and interactive services, and all the channels that it now makes available through commercially funded operations and joint ventures, such as UK Gold. It was inevitable that that a huge increase in the number of BBC services would lead to questions in the public mind about what monitoring had taken place and what scrutiny had been given to applications to ensure that they represented proper activity for the BBC and a sensible use of licence fee payers' money—especially when many of the services are still accessible by only a minority of the population. 
 In earlier discussions on the Bill, we have talked about digital switchover and the importance of encouraging people to access digital television. I strongly support that. However, the fact that everybody has to pay for services that only a minority of people can receive raises serious questions and leads inevitably to complaints from some people who have to finance services that they are completely unable to watch. 
 The Government have put in place a more robust and effective oversight of the approvals and review processes for new BBC services. In particular, the previous Secretary of State for Culture, Media and Sport, the right hon. Member for Islington, South and Finsbury (Mr. Smith), announced details for a new process for approving BBC plans for licence fee-funded services. Under that process, third parties, including regulators, are consulted prior to decisions on new services. Newly approved services are also subject to periodic review. That is obviously a welcome development. 
 The approvals process has been applied to the stream of applications that has come in from the BBC—including, for instance, applications for its new children's channels, for BBC 3 and for BBC 4. The case of BBC 3 in particular has led to additional safeguards being put in place. In a pretty much unprecedented move, the Secretary of State sought assistance from the Independent Television Commission to assess the potential impact of BBC 3 on the commercial operators. That development was welcome and very much in the right direction. 
 Although it makes sense that the Secretary of State and ultimately the Parliament oversee the charter and the licence fee, we do not feel that the Secretary of State should have control over the consultation and review process. It seems to us to make more sense that Ofcom, as a regulator of the broadcasting industry that has the staff and expertise to carry out its work quickly and effectively, be given the responsibility. In spite of the robustness of the Secretary of State's response to the initial BBC 3 application, there is still widespread suspicion that there is a very close relationship between the BBC and the Department for Culture, Media and Sport and that that closeness sometimes represents a conflict of interests. A system of cosy deals is perpetuated—deals that are in the interests of the BBC and the Department rather than of the licence fee payer and the viewer. 
 Is it right that Government Ministers with a direct political interest in the type of news coverage that the BBC provides should have a direct role in the oversight of the process? Is that not another area in which it would be much more sensible for the BBC to be subject to external regulation? 
 I will not repeat what I have said about some BBC services, but it is worth quickly considering one or two other examples. In many ways, BBC 4 represents what the BBC should be about. It is certainly public service programming, but as an illustration of the dangers that arise even when the BBC is providing high-quality arts programming of the sort that we believe to be desirable, I draw the Committee's attention to a report that appeared before Christmas in the Financial Times. Entitled ''Martyr's fate for Classics channel'', it stated: 
''Digital Classics blamed the launch of BBC4 this year for its decision to close its UK digital classical music television . . . The company which ran up losses of £12.3 million . . . for the year to June 30th, said the BBC's free digital cultural channel had 'distorted the digital market'.''
 The chief executive of the company stressed that the company's anger was directed more at the Government for allowing the BBC to launch such a channel than at the BBC itself. He said: 
''Think of us as a Christian martyr after someone let a lion out.''
 That is not to say that the BBC was wrong or the Government were wrong to approve BBC 4, but it is an illustration that, even in such an area, there will be an impact on commercial providers that may, as the case of Digital Classics demonstrates, put them out of business. That, too, is why it is all the more important that there is an external body that will examine complaints from commercial organisations that consider that they will be jeopardised by the activities of the BBC.

Simon Thomas: The hon. Gentleman gave a tenuous example of the potential impact. Although I do not for one moment doubt that the BBC operates in a competitive market and is competing against commercial operators, is it not an attraction to switch over to digital that there is a wide range of public service broadcasting under the BBC brand? Is it not also the case that the majority of people watch BBC and ITV programmes on satellite, not those niche channels to which the hon. Gentleman referred an hour and a quarter ago? He is arguing against himself.
 It is the BBC going digital that will, in time, create the revolution from which commercial companies will benefit.

John Whittingdale: There are two separate points to be made. Obviously, each individual channel needs to be examined to see whether it represents a good use of public money and whether the benefit outweighs a potential impact that each channel may have on an existing commercial company. That needs to be examined carefully and should be subject to external regulation.
 I have never argued that the BBC should not be on a digital platform. To encourage digital switchover, it is essential that the main public service broadcaster be on digital. If the hon. Gentleman thinks that I am saying that the BBC should not have invested in digital channels, he has not understood my argument. I am saying that such channels are bound to have an impact and that they should be subject to external scrutiny. 
 I shall briefly outline some other examples of the wide concern that has been expressed. I have mentioned BBC 3, BBC 4 and BBC News 24. Recently, the BBC has launched its children's channels, CBBC and CBeebies. I occasionally watch them, too—I have two small children, so I experience the channels under duress in most cases. There is a role for public service broadcasting in children's programming, and some people argue that it is even more important that we have public service broadcasting in programmes that are designed for children, rather than the diet of Japanese animated features involving extreme violence, which my children seem to prefer. 
 Some of the BBC's output gives rise to concern. During Christmas, I watched a programme called ''Cavegirl'', which was originally screened on the digital channel, but which has now moved into the main BBC output. The programme raised several concerns about the type of person who is likely to watch it, given that it consists mainly of a very young girl who lives in neanderthal times and wears very little clothing. I cannot quite see how that fits in with the public service remit. The Times reported that when the controller of CBBC was asked 
''why it was necessary for the characters to wear fur bikinis, he said: 'They are wearing the clothes of the time. It is completely authentic.' ''
 The title of that article was ''CBBC's saucy Stone Age provokes outrage''. The clothes did not look particularly authentic to me. 
 With regard to children's programming, concerns have been raised about the impact on existing children's channels, of which there are now a considerable number. Some of them provide high-quality programming without advertising. Currently, eight children's channels are available on digital television, and many of the providers of those channels have been deeply concerned not just about the programming itself, but about the way in which the BBC exploits that programming by producing associated products. If one visits toy fairs, one discovers BBC-branded merchandise from 
 programmes such as the Tweenies and the Teletubbies—even McDonald's are moving into something called ''Tweenies Happy Meals.'' 
 The BBC has been open about its aims. When CBBC was launched, its controller said: 
''Our objective in year one is to become the number one kids channel''.
 I am unsure whether that should have been the main objective of the BBC's children's channels. I think that its objective should have been to provide high-quality and desirable educational programming as an alternative to the Cartoon Network, and not necessarily to compete with the Cartoon Network. That is another example of a BBC activity that is causing concern. 
 I will not discuss BBC News 24 again, but my hon. Friend has talked about the launch of the UK History channel. That looks almost identical to the existing History Channel, which has been around for a long time. The BBC's magazine said that the channel would be launched in 
''direct competition with the History Channel and Discovery Civilisations.''
 Whether it is desirable to have another history channel is debatable, but it must be scrutinised to determine whether it will have a detrimental commercial impact on existing providers. That has been left to the BBC to determine. When the BBC was given approval for its joint ventures with Flextech under the UKTV umbrella, it was originally intended that there should be only eight such channels. However, two years ago, the Government suddenly decided to remove that limit, and to allow the BBC to have any number of these joint venture channels. That decision was taken without any consultation or publicity, and the existing commercial TV channel providers were surprised when they suddenly discovered that one of the restraints on the BBC had been removed.

Brian White: I am curious about the hon. Gentleman's argument. One of the reasons that Ofcom was set up was to examine competition issues; that comes out of the European directive on telecoms. However, the hon. Gentleman is arguing that there should be a commercial monopoly, and that there should not be competition from the BBC with regard to some of these individual programmes. Is he arguing that Ofcom should endorse a commercial monopoly?

John Whittingdale: It is not a monopoly because there are several competing providers—I said that there were eight existing children's channels, for instance.
 I am not arguing that the BBC should not be given approval: I am saying that serious questions are being raised about the impact of these new BBC channels, and that the existing regulatory structure is insufficient to convince people that those concerns are being properly addressed. Therefore, the purpose of our amendments is to give people the confidence that there will be sufficient external scrutiny. 
 While I am on the question of UKTV and the joint ventures, there is an interesting question about whether Ofcom will have responsibility for regulating and monitoring those channels. UKTV is a joint venture between the BBC and commercial broadcasters, so perhaps they should be subject to a degree of external regulation. Currently, however, the BBC seems to be under no obligation to supply information to a regulator, and there is concern that costs associated with providing those channels will be hidden by the BBC, perhaps to make it appear that UKTV is in better shape than it really is. Ofcom will need to address that. 
 While going through these examples, I must touch on the BBC's activities on the internet. Last week, the Government finally approved the online digital curriculum, despite the huge concerns expressed by the existing providers of educational software that that would drive them out of the market. The safeguards put in place by the Secretary of State may or may not prove sufficient, but again that is an example of where it would have been far better to have external scrutiny. 
 I draw the Minister's attention to the remarks of the chairman of the British Internet Publishers Alliance: 
''While there is properly a migration path for some BBC services from broadcast to internet distribution, the lack of clear boundaries to the Corporation's amply funded activities has engendered a . . . degree of market distortion and uncertainty that the commercial sector remains severely disadvantaged. It is extremely difficult to compete with a body enjoying both protection from normal commercial disciplines, and peerless opportunities for cross-promotion from existing broadcast activities.''
 I have not gone into the question of cross-promotion, although it was mentioned. The BBC constantly promotes other BBC operations on its main channels. It would cost millions of pounds for ordinary commercial broadcasters or publishers to purchase the amount of television exposure that the BBC provides for its own products, yet the BBC is under no constraint in this respect. 
 ITN, among other organisations, has expressed particular concern about the fair trading commitment. It points to a number of examples of BBC Worldwide flouting that commitment by promoting BBC world news. One instance is its promotion in the United States. There is talk of a joint venture with an American broadcaster on the promotion of in-flight news services for British Airways and on-board news for the Heathrow express rail link. Each of those services is offered by BBC World free of charge or with big discounts to squeeze out commercial operators, even though the fair trading commitment explicitly forbids such practices. 
 When people have complained about unfair competition from the BBC, all too often they have finally received a letter back from the Secretary of State saying, ''We have asked the chairman of the board of governors of the BBC whether licence fee payers' money is being used to subsidise unfair competition with commercial providers, and we have been given an absolute assurance that it is not.'' That is simply not sufficient. It does not inspire confidence to say that the governors have been asked whether they are cheating and they say that they are not. 
 I shall conclude by quoting Mr. David Liddiment, a well known figure in the broadcasting world, who recently gave up his post as ITV director of programmes. He said that, as a result of the Bill, 
''BBC governors will remain judge and jury of the corporation's activities, almost entirely outside the jurisdiction of new regulator Ofcom.''
 The Government seem determined not to close that gaping hole in a good Bill, and all the evidence shows that that may be a mistake. He continues: 
''If the BBC is, as it claims, the most regulated broadcaster in Britain, this must happen invisibly, because I can't see it. There's little evidence of the governors having an objective perspective on the organisation for which they are accountable.''
 I believe that the case we have made for bringing the BBC under Ofcom's remit is almost unarguable. That case is not just supported by us, but by a wide range of people in the broadcasting and political worlds, and on Second Reading a number of Government Members supported it. If the Government are not persuaded of our argument, I shall be disappointed, but there is a fall-back and I point the Minister in the direction of new clause 29. 
 New clause 29 is designed to provide a mechanism in future, whereby the Government could extend Ofcom's remit to take in the activities of the BBC. My hon. Friend the Member for South Cambridgeshire said that there was a fear that when the charter was to be renewed people might say, ''Actually the BBC needs to be brought under external regulation. Ofcom has proved itself, and we think that that should happen''. He argued that they would say, ''Not another broadcasting or communications Bill. The last thing we want to do is to open all that up again and have primary legislation. There is all the competition in the legislation Committee, and the earliest possible time for Parliament to reconsider these matters is at least two or three years hence.'' There would be real obstacles to obtaining the time to revisit such matters in the House. 
 New clause 29 would give the Secretary of State powers to lay an order at a future date that would allow Ofcom to take on the regulation of the BBC. I hope that the Minister has been persuaded by the power of our argument that Ofcom should take on that role. If he is not willing to accept that case, perhaps he will at least consider new clause 29, which would provide the mechanism at some future date to bring the BBC under the external regulation that I believe it desperately needs. If the new clause is introduced, we would not need to go through this process again, and hon. Members would not have to listen to me speak for as long as I have spoken today. I am happy to support the amendments.

Nick Harvey: The BBC is a unique, large broadcaster. No other broadcaster has a funding flow like the BBC, nor could any aspire to that. In return for that huge sum of money, the BBC has a wide public service remit, so we should regard it as unique. The BBC is not, in any sense, a creature of the market. That is not to say that it exists or operates in splendid isolation, but it cannot be regarded as simply another player in the market. The BBC is, perhaps, a market maker and others have to react to that.
 I believe that the BBC, including the content of its programmes and the fulfilment of its public service remit, needs far more external regulation than any other television broadcaster. We must ask ourselves where that regulation should logically come from and how it should be put in place. 
 There has been much criticism of the current BBC governors from the hon. Member for South Cambridgeshire in his opening remarks and from the hon. Member for Maldon and East Chelmsford. The board of governors seems to be in a cosy relationship with BBC management. The governors are almost inside the BBC. A constant refrain from the hon. Member for Maldon and East Chelmsford was that the BBC should be subject to external regulation. The governors of the BBC are supposed to constitute external regulation, but many of us accept that that is not what they do. To that extent, some of the criticisms are right and I echo those made by the hon. Member for South Cambridgeshire. 
 We will get the opportunity to visit all the relevant issues and consider what constitutes suitable governance for the BBC in the future when we debate the royal charter, which must be renewed at the end of 2006. The new charter must put in place something significantly different. The current royal charter may arguably have served the BBC well over the decades, but it looks increasingly antiquated in the modern, vastly changed broadcasting market. However, such issues will be debated at a later stage. 
 We must decide whether inadequacies in the existing arrangements are best dealt with by placing the BBC entirely under Ofcom. To arrive at a view, we must consider what Ofcom is and what it will do. Earlier in our proceedings, we debated whether the general duties of Ofcom should include a responsibility to address issues of citizenship. The Minister objected to the word ''citizen'' because it could be confused with issues of nationality or immigration. Fair enough, let us not worry about the terminology. However, many of us—I was pleased that the Conservatives were also arguing the case—said that Ofcom should have responsibility for the public interest. 
 Ofcom should not only be responsible for commercial and competition considerations and for examining the interests of the consumer. Its concerns should be wider and include the public interest. The Government resisted that idea, and the Bill as drafted does not include a public interest remit for Ofcom. If responsibility for patrolling the huge funds that come annually from licence fees and policing the performance of this vast public service remit is to be placed on Ofcom as the Bill is currently drafted, we will be putting responsibility in the hands of a body with no wider public interest remit. That would be a stupid thing to do. 
 The hon. Member for Ceredigion challenged the hon. Member for Maldon and East Chelmsford to explain why he had such a preference for transferring responsibility from BBC governors appointed by the Secretary of State to Ofcom staff appointed by the Secretary of State. That is a good question. At least 
 BBC governors have a precise public service remit and a specific responsibility to examine all the cultural issues—for want of a better way of putting it—that make up the BBC remit. Ofcom will have none of that—it is essentially an economic regulator. The content board that will examine some cultural issues is a subsidiary activity of Ofcom, and by no means its primary activity.

Brian White: Does Ofcom not have a duty under the Bill to examine the ecology of television and to produce reports on that? Given that there is a public service ethos, does that not go against what the hon. Gentleman suggests?

Nick Harvey: It is one responsibility but it is nowhere near sufficiently comprehensive or detailed to equip Ofcom to examine the BBC's entire performance on its public service remit. I am glad that Ofcom has the responsibility—it should have it—but that is a world away from giving it detailed nuts-and-bolts tools to regulate the BBC. It is right that Ofcom has the ability to present reports and to make recommendations about the impact of the BBC's activities on the broadcasting ecology. Both the Secretary of State in Parliament and the BBC governors should pay heed to reports that Ofcom produces about the impact of the BBC's activities on the overall broadcasting sector. That does not necessarily make Ofcom a fit body to patrol all the BBC's activities.
 Ofcom is a new body that is yet to get up and running. It will bring together five existing regulators and will use three relatively new pieces of legislation. It is unproven in every sense. After several years of operation, it might prove itself and be capable of taking on that role after a refinement to its remit. However, it would be a huge gamble to give it responsibility at its outset for something as huge and precious as the BBC. 
 A couple of months ago, I had a meeting with a Taiwanese gentleman with responsibility for cultural industries. I suspect that one or two other hon. Members might have met the gentleman because his diary secretary was nothing if not a little persistent. He told me that the Taiwanese were at the forefront of the digital revolution, that they have cable in virtually every home and that almost every home has multi-channel viewing. They are thoroughly pleased with themselves about the hardware developments that they have made. However, they realised that they made a significant mistake: they liberalised all their content and all their culture industries in one fell swoop. Consequently, they allowed foreign owners into their television companies and consolidation of their television companies, both of which we will come on to discuss. They also allowed Americans, especially, to buy into their film and music industries. 
 In a short time, the number of films produced in Taiwan each year had plummeted to a tiny fraction of what it had been. The amount of music produced had plummeted and the amount of Americanisation of the content of their television programming had grown exponentially. After the gentleman had related the sad 
 tale, he said that the one defence that we in Britain have against such things is the BBC. He said, ''Whatever you do, for God's sake protect that at all costs and do not simply hurl it to the market.'' The implications of the arguments advanced by the hon. Member for Maldon and East Chelmsford are that exactly that would happen and the mistake that the Taiwanese official warned me about would be made.

Michael Fabricant: Does the hon. Gentleman take comfort in the fact that Broadcasting & Cable magazine, which is published in the United States, said over Christmas that although American television programmes were shown at prime time by European commercial broadcasters 10 years ago, they have now been relegated to off-peak times? The magazine was bemoaning the fact that the Americanisation of overseas broadcasters is becoming less, not more, prevalent.

Nick Harvey: I sincerely doubt that that is true in the global context. The hon. Gentleman's specific point may bear examination but, nevertheless, the growth of American culture to the point almost of worldwide takeover is a phenomenon that cannot seriously be queried.

Michael Fabricant: What about the French?

Nick Harvey: I do not suggest going quite as far as the French in protecting ourselves from that takeover, but I take the hon. Gentleman's point.
 Some of the arguments that we heard during the previous contribution were contradictory. What do we want from the BBC? Do we want it to do the things that the market either is not doing or cannot do? If that is what we want, we have to accept that the BBC will become a ghetto—a sort of cranks' corner. Some of the specific cases that the hon. Member for Maldon and East Chelmsford mentioned seemed contradictory. For example, he said that the BBC used to produce ''Top of the Pops'' vinyls, but that he could see no need for it to do so any longer, because others could do it. He then said that ''EastEnders'' was a first-class example of public service broadcasting and that he would not want, at any cost, to see it go. I cannot see the difference between the two cases. Clearly, the commercial sector is perfectly capable of producing high-quality soap operas. If we start applying the logic that the BBC should only do things that others cannot or do not do, we would not allow the BBC to produce shows such as ''EastEnders''. We must have a clear idea of what we want the BBC to do. 
 The hon. Gentleman bemoaned the passing of various current affairs programmes and said what a shame it was that ''Panorama'' had been downgraded. He mentioned another couple of programmes; my hon. Friend the Member for Sheffield, Hallam (Mr. Allan) pointed out that they happened to be ITV programmes but we understood the point that the hon. Gentleman was making. Does he not accept that, unless BBC1 is producing the populist programmes that he bemoans, by the time it comes along with ''Panorama'' or with its coverage of Parliament—which the hon. Gentleman also considers to have been downgraded—there will not be anyone tuned in to 
 watch them? The logic of the BBC building an audience through popular programming is perfectly sound. In an era in which more and more television viewing will become, because of multiple channels, à la carte, there is nevertheless real value in having a high quality menu fixé.

John Whittingdale: The hon. Gentleman is advancing an argument that I have heard from the BBC on a number of occasions—the argument being that the only way in which one can get someone to watch an informative and educative programme is by putting on something very popular immediately beforehand. I have always regarded that as a somewhat patronising argument. I am not sure that it even applies now because, with the development of multi-channel television and things such as TiVos and VCRs, scheduling is no longer in the hands of programme makers, but in the hands of the viewer who can choose when he wishes to watch a programme. I think that that is a very positive development.

Nick Harvey: I do not disagree with the hon. Gentleman but I am not sure that the situation is as positive as he makes out. I do not feel patronised when the BBC or any other channel presents a trailer of something that is coming up. Some of the best programmes that I have ever seen I discovered by accident because I happened to have been tuned in to the particular station when the programme came on. Even in this multi-channel era, and even in the era of the new technologies that the hon. Gentleman describes, a great deal of channel loyalty still exists. People will go to particular channels because they have enjoyed programmes there before and want to find out what is coming up in future. I am not suggesting a restriction of choice but, if people have 500 or more channels to choose from, and if all viewing is done by people choosing what they want, when they want it—which they must be allowed to—people will never find some of the best programming. Serendipity makes for some of the best TV viewing. If we do not collect top-quality programming in particular places, there is a real risk that audiences will not be built and that people will never find that programming. If the hon. Gentleman cannot see the ongoing value of mixed channels such as BBC1 and ITV 1 and others in the multi-channel era, I am very surprised. I do not believe that it is offensive, or demeaning to consumers, that those sorts of channels should lead them into watching other things.
 The BBC, by definition, distorts the market. Everything it does distorts the market. It has what the market might reasonably view as a completely unfair stream of money. It does not have to tout itself in the advertising market with its ups and downs. Every time that it begins a new service it distorts the market. We had an exchange a few minutes ago about the History Channel and the challenge posed to it by UKTV. We welcome competition. It was no bad thing for a second history channel to come into being, but each time the BBC introduces a new service it distorts the market. 
 If the responsibility for deciding what the BBC should be allowed to do rests with a body whose primary responsibility is to ensure fair competition, that body will inevitably conclude that more and more of what the BBC does should not be allowed and that in virtually no circumstances should it be allowed to commence a new service. Ofcom, whose primary responsibilities are to ensure fair competition, cannot make decisions about whether a new service is in the public interest. The Secretary of State is much better placed to make those decisions than an economic regulator who has not even been given a responsibility to ensure public interest considerations.

John Whittingdale: The hon. Gentleman suggested earlier that one or two or my remarks were contradictory. He seems to be saying that he thinks such matters should rest with the Secretary of State and that Ofcom should not have responsibility, at least at this stage, yet on Thursday he issued a press release, the first line of which was:
''OFCOM should be asked to keep the BBC under constant review from day one''.
 His argument is somewhat contradictory because that is precisely what new clause 19 is designed to achieve.

Nick Harvey: The hon. Gentleman is quite deliberately taking what is essentially a commercial operation by the BBC, which I do believe should be observed by Ofcom, and suggesting that that is my approach to the entire range of the BBC's public service activity, which it is not. The Bill provides for Ofcom to have some oversight of BBC activities. As the hon. Member for Milton Keynes, North-East (Brian White) observed some time ago, Ofcom is also expected to present reports about the impact of the BBC's activities on the general broadcasting ecology, all of which is entirely right. The press release should be seen in that context.
 Overall responsibility for the wide public remit that the BBC is expected to fulfil is not a matter that ought to be dealt with primarily by Ofcom. Ultimately, the Secretary of State, who has a brief to consider cultural issues, should make those decisions. It is absolutely right that, when approving any new service, the Secretary of State should have on her desk a report from Ofcom about the impact it will have on the market and on the broadcasting ecology, to take up that phrase. That is infinitely preferable to the decision being made by Ofcom with a note on its desk from the Secretary of State about the cultural issues. The BBC has its public service remit and the market has to respond to what the Secretary of State decides it should be allowed to do in fulfilling that remit and using the money it has from the licence—not the other way around. 
 The governors appear too cosy—as though they are half inside the BBC. The fact that some people can refer to the chairman of the BBC board of governors as the ''chairman of the BBC'' proves that in the public perception and in journalistic shorthand that relationship sometimes appears to be far too close. In future, it will be far healthier for the BBC to have a board of directors like any other company or 
 organisation, and for an organisation more closely resembling an inspectorate to make regulation. Such an inspectorate would be equipped with public service duties and the wherewithal to examine whether the BBC is fulfilling its public service. It would not be in the least like an economic regulator, which does not have the appropriate remit to fulfil this work. 
 Individually, some of the amendments are superficially quite attractive. Collectively, however, it is clear that the Conservatives are trying to create a situation in which Ofcom could, on the nod, be given responsibility for the BBC at some point in future. I am especially unhappy about that. Such a proposal should necessitate a proper, full, vigorous debate in Parliament. We would certainly need to go right back to the beginning and reconsider Ofcom's general duties, and to write into those duties public interest responsibility that it does not currently have. We should not be able to do that easily or by sleight of hand. This is a fundamental issue, which should make us return to the drawing board. 
 The amendments should be resisted in general. It would not be in the public interest for such responsibility to be given by the back door. We must wait until the charter renewal process has been concluded. If it is then thought to be right to extend Ofcom's remit over the BBC, primary legislation will required. That does not mean that we must have a Bill with as many clauses as this one. It could be a perfectly controllable, small Bill, but there is no justification for responsibility being conferred by the back door, which the amendments would do.

Simon Thomas: This morning's debate has proved that debating television does not make good television.

Michael Fabricant: We are being broadcast.

Simon Thomas: We are, but presumably by radio, not by television.
 We have had an interesting debate, but I did not find any of the arguments made by the hon. Member for Maldon and East Chelmsford enticing until the last three minutes of his speech when he discussed new clause 29, which appears to have some merit in that it at least tries to look to the future. The new clause tabled by the hon. Member for South Cambridgeshire is similar. 
 However, I did not find the general tenor of the remarks made by the hon. Member for Maldon and East Chelmsford at all attractive. He began by saying that we all agreed with Ofcom. I remind him that the reason that we voted on Second Reading—I do not know if he was present—was that there was a reasoned amendment standing in my name. Some of us are, in fact, not too keen on Ofcom, which we regard as too much of an economic regulator whose remit is not sufficiently in the public interest. The Committee has had that debate, but has not resolved to give Ofcom a public interest role. 
 That supports the view of the spokesman for the Liberal Democrats, the hon. Member for North Devon (Nick Harvey), who said, rightly, that it 
 would be a retrograde step to import into the Bill such a role for Ofcom when the whole reason for Ofcom, as set out in clause 3, is simply 
''to further the interests of consumers in relevant markets, where appropriate by promoting competition''.
 I do not see how the BBC, as the public sector broadcaster in the United Kingdom, fits comfortably within that Ofcom remit. I accept the hon. Gentleman's arguments that, if we were to include the BBC in Ofcom's remit, we would have to discuss again the numerous aspects of Ofcom. 
 I will give an example from the Welsh perspective. It is perhaps ironic that a Member from Wales should defend the BBC governors after the Anne Robinson affair, but we forgive and forget. With the development of Ofcom and the challenges of devolution during the past few years, the BBC has focused more on the public interest, especially with the role of the BBC governor for Wales, the Broadcasting Council for Wales and similar institutions in Scotland and Northern Ireland. Therefore, there is huge public interest outwith the Bill, which we earlier decided not to include in the Bill's framework but is retained by our main public sector and interest broadcaster. We would be remiss if we tried de facto to sweep away what remains a strong public accountability role in the BBC by making the changes in question. 
 I accept that that public accountability role can be obtuse on occasions. The hon. Members for Maldon and East Chelmsford and for South Cambridgeshire gave several examples of where that role has been blurred in the past and how the governors' non-executive role has become executive as they have become bound up in the management of the BBC. It is valid to work with the BBC on that point, and the corporation says that it has examined the difficulties and is trying to overcome them. The charter renewal process gives us an avenue by which we can ensure that that happens. 
 Another concern with the framework of Ofcom is that we are centralising extremely important industries—broadcasting and telecommunications—in the hands of a small regulator with no representative role. It will have simply a technocratic and specialist regulatory role. I have spoken about those concerns on several occasions as the Bill has passed through the House, and I do not want to see that spread over to the BBC, so that the whole lot goes down. If Ofcom sails as a wonderful ship and does not become the Titanic of the broadcasting and telecommunications industry, the BBC may want to get on board. However, if as I suspect there is public and parliamentary disquiet about some of Ofcom's decisions, we will find as parliamentarians that we have no influence over Ofcom and we might regret putting our other public sector broadcaster on that ship. No matter how obtuse and opaque it remains on occasions, the BBC is a more obviously democratic and accountable body than any other broadcaster that will come under the aegis of Ofcom because of the charter renewal process, the role of the Secretary of State, and the appointment of governors, many of whom represent interests, regions and nations in the United Kingdom. 
 For those reasons, I will resist the Conservative amendments. It is important that we do not include the BBC in Ofcom's remit at this stage. I accept that the renewal process may change the circumstances, and we may need to examine the point again. However, like the hon. Member for North Devon, I think that that would be a fairly simple piece of work, which would surely also include changing some aspects of Ofcom. We have decided not to do that, but instead to embark on a way of working with Ofcom that involves a particular regulatory framework and economic regulation. The BBC would not sit well within that. 
 We must have public accountability for the BBC. Some of the examples given by the hon. Member for Maldon and East Chelmsford were relevant, and I accept that even those that I thought were not relevant had some public disquiet behind them. Perhaps there is a certain unhappiness in the lack of conservatism—if I can use that phrase—as people see things change about them. Familiar programmes disappear and new ones come on air, but in five years the new programmes may be as familiar to us as the old ones, and we must give the BBC some freedom to manage its programme schedules. I was struck by a certain element of micro-management that I thought crept occasionally into the hon. Gentleman's remarks. Nevertheless, this is not the Bill that can regulate the BBC as a public interest broadcaster. I hope that the Government will reject the amendments that were tabled by the official Opposition. 
 In conclusion, I had a sneaking feeling that, if all the amendments tabled by Conservative Members were accepted, it would be a lot easier to privatise the BBC and get rid of the licence fee.

John Whittingdale: I think that precisely the reverse is true. I believe that, if the BBC were allowed to continue outside the regulation of external scrutiny, with all the huge resources at its command, growing dissatisfaction will support those who look for more radical options. The BBC is making a huge mistake. By staying outside Ofcom, it will make it easier for people to argue the case for a more fundamental change to be made to its structure than we are considering now under the Bill.

Simon Thomas: I am sure that the hon. Gentleman's views are genuinely held. I take them as a vote of confidence in the BBC and that he is trying only to do the very best for it by tabling such amendments. However, even those comments have not persuaded me to support them.

Michael Fabricant: During discussions on the Office of Communications Act 2002 and so far on this Bill, I agreed with 90 per cent.—if not 100 per cent.—of what the hon. Member for Ceredigion has said. However, I disagree with him profoundly now. I am surprised that such a disagreement has occurred. As my hon. Friend the Member for Maldon and East Chelmsford said, we disagree with the line being taken by the Government in this respect, but, on the whole, we support the Communications Bill. It is logical that, when there is convergence of technology, there is convergence of
 various regulatory bodies. That is the Bill's raison d'être.
 While rising to support the amendments tabled by my hon. Friends the Members for Maldon and East Chelmsford and for South Cambridgeshire, I do so not to condemn the BBC, but to praise it.

Andrew Robathan: Bury it!

Michael Fabricant: No. As my hon. Friend the Member for Maldon and East Chelmsford said, by supporting the amendments, we will strengthen and preserve the BBC. Let me say a few good words about the corporation before I go into detail about the amendments. The BBC distorts the market, but in a good way. Although ITV is suffering a falling audience, BBC 1 and BBC 2 are increasing not only their market share, but their total reach—the number of hours viewed each week. Of course we can criticise the organisation at a micro-level, but I disagree with my hon. Friend, because the BBC is achieving the right balance between presenting programmes of value and worth that he would identify as such, while also providing programmes that are of a more popular nature.
 Incidentally, the two sorts of programmes are not always mutually exclusive. I am not a great follower of ''Neighbours'' or ''EastEnders''. Incidentally, it is interesting that ''Neighbours'' is unpopular in Australia. It was to be taken off in that country, and the only reason it continues there is because it pulls in such a huge audience in the United Kingdom. Such programming contains stories of morality, and that is of value. Again, I disagree with my hon. Friend the Member for Maldon and East Chelmsford: such programmes can lead people to watch programmes that might be viewed as being of greater worth, such as the news. 
 I remember when, in the 1970s, Professor Andrew Ehrenberg, who was then at the London school of economics, produced a good report that analysed in detail viewing and listening habits in the United Kingdom and the United States. Then, as now, there was clear evidence that, despite the vast number of channels available, people tended to watch the next programme that came on. Despite the existence of TiVo and of VCRs, which many people still cannot operate, people view programmes in the order in which broadcasters present them. 
 Some £2.5 billion of public money goes into the funding of the BBC. That investment generates more overseas and UK correspondents than ABC, CBS, NBC, CNN and Fox News have together. The BBC is not just the biggest broadcasting newsgatherer in the UK, it is by far the biggest broadcasting newsgatherer in the world. That is only possible thanks to the means of funding that we currently enjoy—the licence fee. It will be a long time before any other form of funding can replace that. Right or wrong, so long as the BBC is publicly funded, that distortion—it is a good distortion—needs to be addressed. There is also distortion in the Bill and that represents the only profound difficulty that the major parties have with each other. 
 Even if the Minister cannot adopt the amendments and new clauses, I hope that he can show the flexibility that his Department of Trade and Industry counterpart demonstrated by saying that he had heard the arguments and would return with amendments that reflected the fact that the arguments were overpowering. The amendments should be adopted to protect the BBC. Time and again, when the BBC is criticised—whether for its programming policy within a channel, for its distribution of programmes between channels, or on a question of fair trading—what is needed is a visible external, independent arbiter. My hon. Friend the Member for Maldon and East Chelmsford gave an excellent example of why that should be when he spoke of the similarity between the BBC and a big organisation like BT plc. BT plc has a board of directors and that board is appointed by the shareholders. The BBC has a board of governors that is appointed by the funders—the public fund the BBC though the licence fee and they elect the Government and the Secretary of State, who appoints the governors. 
 I do not see why, if the Government, rightly, take the line that from time to time independent arbiters must control the activities of the board of directors of BT for the greater public good, the BBC board of governors should not also be controlled by independent arbiters, namely, Ofcom. I do not envisage that Ofcom will intervene on many occasions. People often complain of competition—both the Plaid Cymru and the Liberal Democrat spokesmen and the hon. Member for Milton Keynes, North-East have said that. There is nothing wrong with competition. I do not disagree with my hon. Friend the Member for Maldon and East Chelmsford, because I know that he supports competition. However, he gave a couple of examples, including the History Channel. The complaints made by the History Channel are, in my view, spurious. Nevertheless, there will always be doubt when the BBC is its own arbiter. 
 It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.